Yes, that would be my feedback on slurs in a Choicescript title. Since we as the authors are using second-person viewpoint narration, it feels especially egregious to use words or slurs like that in the narration, because it’s supposed to be the player’s character’s thoughts, though depending on the writing style, that distinction may be more or less true.
Even in a racist setting or era, it should, I feel, always be up to the player if they want their character to be racist. The game shouldn’t assume that for them, so the narration shouldn’t use slurs. But if you want a character to use slurs to illustrate their ignorance, hatred, despicable-ness, etc. I think that’s on the table, sure.
You just have to be careful how you do it, and mindful not to go overboard on something like that. It’s one thing to have some slurs pop up occasionally for verisimilitude to remind the player of the setting or time period, it’s another entirely to bombard the reader with them constantly to the point where someone can say, “Good grief. The author sure likes using those words, don’t they?” 
But I would never say slurs are off the table, because there have been amazing works of fiction that use them that would lose a lot of teeth and meaning if words like that were stripped out. Words have power, which is why we are writers, and why we’re even having this particular discussion. You just need to make sure you are using that power responsibly with intention.
If it makes you feel better, I think that’s come through in the discussion.
I want to be clear too, that I’m not against sensitivity readers. Input that you may be inadvertently offending people is invaluable.
I think what this thread has really showed is that invaluable service can be done badly and context, more than specific word choices, is king.